Working Paper | Abstract

This paper develops a novel econometric framework for static discrete choice games with costly information acquisition. In traditional discrete games, players are assumed to perfectly know their own payoffs when making decisions, ignoring that information acquisition can be a strategic choice. In the proposed framework, I relax this assumption by allowing players to face uncertainty about their own payoffs and to optimally choose both the precision of information and their actions, balancing the expected payoffs from precise information against the information cost. The model provides a unified structure to analyze how information and strategic interactions jointly determine equilibrium outcomes. The model primitives are point identified, and the identification results are illustrated through Monte Carlo experiments. The empirical application of the U.S airline entry game shows that the low-cost carriers acquire less precise information about profits and incur lower information costs than other airlines, which is consistent with their business model that focuses on cost efficiency. The analysis highlights how differences in firms’ information strategies can explain observed heterogeneity in market entry behavior and competition.

Working Paper | Abstract | BibTeX

We consider multiplicity and uniqueness of equilibria in continuous-time dynamic discrete games where players move sequentially according to independent Poisson processes. With multiple equilibria, the structural model is incomplete: the reduced form and counterfactual predictions depend on how equilibria are selected. We provide closed-form sufficient conditions for uniqueness of Markov perfect equilibrium in this class of games. The conditions are semiparametric and can be verified from model primitives. To measure the coverage of the conditions and characterize multiplicity more broadly, we carry out a large-scale numerical search for equilibria of a dynamic duopoly model of entry and exit. Although uniqueness is the norm in our broad search, we find that multiplicity concentrates in economically relevant regions: where the market cannot profitably sustain both firms, where firms are very patient, and at intermediate decision frequencies that balance strategic interaction and commitment. When multiplicity is present, we typically find two stable asymmetric equilibria and one unstable symmetric equilibrium. Monte Carlo and counterfactual simulations show this structure matters for empirical work. A full-solution estimator that assumes uniqueness can converge to the unstable equilibrium, even when the data were generated by a stable one, while a two-step estimator recovers the correct equilibrium.

      @TechReport{blevins-jeong-wp,
        author      = {Jason R. Blevins and Youngjae Jeong},
        title       = {Multiplicity and Uniqueness of Equilibria in
                       Continuous-Time Dynamic Discrete Choice Games},
        type        = {Working Paper},
        institution = {The Ohio State University},
        year        = 2026
      }
      

Draft available soon | Abstract

This paper studies the strategic and economic implications of a durable goods manufacturer’s entry into the secondary market. We specifically focus on the recent entry of Korean domestic automobile manufacturers into the used car market in South Korea, where a recent government policy change authorized manufacturers to operate the secondary market, which was previously prohibited. We utilize a comprehensive dataset of the Korean automotive market, and estimate the demand for new and used cars to analyze the trade-off between the cannibalization effect and the resale value effect. We find that the manufacturer’s entry into the secondary market increases the demand for used cars, while the potential cannibalization effect on new car sales is negligible. Moreover, we find that the policy intervention results in a consumer welfare gain of $298 on average, primarily driven by the reduction in information asymmetry and the provision of quality assurance. Our findings suggest that manufacturer’s entry into the secondary market does not necessarily have negative effects on primary market demand. Instead, it serves as a strategy that stabilizes resale values and enhances overall brand reliability.